RVing Emergency Fund

RVs are very complex systems with a lot of working parts that could potentially fail, even small ones without engines like my Casita. Ask any owner, even of a brand new RV, and you’ll quickly learn that they not only require regular maintenance, but that if you own one sooner or later something will break down on it or require fixing.

I’m not saying this to try to scare anyone away from this lifestyle, but rather state it as a fact of ownership to better prepare you. RVs, even ones meant for full-timing, aren’t built as well as houses are. Manufacturers make more money the faster they can churn them out, and the majority of RVs are only ‘vacation’ quality – basically the manufacturer knows they’ll only get used a couple times a year and so don’t need to be as durable.

When planning to go full-timing it’s important to take these costs into consideration, because you’ll be putting a lot more wear and tear on the RV than the average owner. If you owned a house prior to hitting the road it’s likely that you already set aside money for maintenance and this should not be a foreign concept. If you’re like me and have only lived in apartments where maintenance stuff was taken care of by your landlord it’s probable that you don’t.

But the emergency fund part was what I really wanted to talk about. Basically, if you’re full-timing, you should have one. How big should it be? Well, that depends.

This fund exists to cover all of the unexpected things that could crop up while on the road. My RV was made in ’99 and when I bought it in 2012, still has all of the original appliances. The water-heater needed replacing in 2015 and the fridge in 2016. Even if your RV is (or is going to be) new, things like tire blowouts and mis-calculated parking jobs still happen and cost money to repair. Better to have something set aside for these times.

Health care is another reason. Many younger people who full-time have plans with a deductible before health insurance kicks in, myself included. My plan also has a co-pay after that. I’m healthy and have no pre-existing conditions, but an emergency visit could be very costly even with insurance.

Because of this and a couple other factors, I decided that $5,000 was the amount my emergency fund should be when I hit the road. In April of 2016 I upped that to $6,000 because of rising costs and aging equipment.

$6,000 covers a lot. Now if I should happen to have a health crisis at the same time as a major mechanical failure I may be in trouble, but in the end it’s all about chances and I’m personally willing to risk the small chance that multiple very expensive things will happen at once. I also have insurance on the RV and truck and if I were to get into an accident there would be some coverage there.

Basically I researched what could go wrong while on the road and looked at my health insurance deductible, then looked at what I had in the bank and made my decision. Your number will probably be different than mine, and that’s okay. What’s most important is looking at your own situation and figuring out what you feel comfortable with. Don’t let anyone else tell you what the number should be, it’s your life and your decision.

Some people have a separate bank account for their emergency fund, if that’s what it takes to keep you from spending that money on something else, go ahead and do it. I’ve always been pretty careful with my money and just decided that my savings account should never dip below $6,000.

The unofficial part 2 of this post, the Vehicle Replacement Fund, can be found here.

Are you planning on having or do you have an emergency fund? What do you think is a good number for one?

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Becky

At IO I teach people how to ditch the status quo and travel full-time before retirement, and share stories of my adventures (and misadventures) to inspire future nomads and armchair travelers alike. Included at no additional charge: seizing your dreams, living boldly, and making a difference.

12 Comments

Marciaon June 12, 2012 at 8:50 pm

We aren’t fulltimers (yet) but spend about 3 months on the road each year. Since our health insurance is taken care of, we keep an emergency fund of about $5,000 for truck and trailer expenses and unforeseen pet emergencies, etc. Last year we spent about 1,500 of it (some on non-emergency stuff). But as an older couple, I think we’ll try to have $10,000 before we go fulltime – it won’t stop us if we don’t reach that goal though. And I think yours is good for your current age and lifestyle. Thanks for giving folks something to think about 🙂

Beckyon June 13, 2012 at 3:32 pm

Your welcome Marcia, I’m glad you found the post helpful. Best of luck getting on the road full-time and let us know how it goes!

Seems to me the question is much different for folks who have an income coming in than for those who don’t. An $8000 savings for potential RV repairs or truck and trailer is a good idea as is considering an extended warranty and weighing the costs. But the health insurance question is the real problem for folks full timing before retirement. If you take out a health policy with a big deductible and have the $5K in an account, that’s great the first year. But what if you are unlucky enough to have a serious health condition that happens say in October and runs over into the next year. Those deductibles reset at the beginning of each year. So where does year #2’s $5K come from?? It’s a real dilemma trying to decide what’s the best thing for health insurance.

Yep, there is no right answer Sherry, just the answer that makes the most sense for you.

Either you take the risk of something like that happening, or you delay going until you have a higher amount saved up. I decided taking the small risk of a medical catastrophy occuring near the end of the year was better than waiting who knows how many more years to save up another $5,000.

Actually I can calculate it out. Living in my old apartment I was saving up about $200 a month. If you do the math getting another $5,000 would have taken me 25 more months. That’s just over 2 more years of my life spent at a job I didn’t like being miserable. Not worth it to me.

And you can go farther with this. Lets say I waited it out and had $10,000 when I left to go RVing. What if I then became chronically ill, as in treatment doesn’t take two years but is something I have to manage for the rest of my life? Then $10,00 still isn’t going to be enough.

I think you can see where I’m going here. What it comes down to is you need to weigh it out for yourself the balance between having enough money and getting on the road soon enough.

Some people are okay with taking the risk, others wouldn’t feel comfortable without a bigger safety net. We are all different and that’s okay. I’m just bringing up the subject to give people who haven’t thought about it before something to contemplate.

Marvinon June 12, 2012 at 2:35 pm

Becky ,

Your thoughts are absolutely correct . Keeping the money available in a savings is good for an emergency – it also promotes discipline in daily habits .

I spend 5 -7 days a month at home and still need to be prepared for whatever events happen , on the road or the S & B .

I keep a years living expenses in my backup fund due to having both an RV and the house . When the house sells , I will probably cut that back to 6 months . I enjoy doing my own maintenance and I have tracked all of my maintenance costs for the last two years , also keeping a detailed list of the monthly expenses . My biggest expense is fuel and I would sure like to trim that amount .

Beckyon June 13, 2012 at 3:13 pm

It’s amazing how much more I’m spending in fuel now that i have a truck compared to what my Honda Civic was. Since I started keeping track of fuel costs I can understand why there are people out there who decide to forgo having a car at all and use public transport and bicycles to get around, it really would add up fast.

Since I’m not keen on traveling the country by bicycle or on my own two feet (not right now anyway, who knows how I’ll feel down the road) the truck is a necessary evil, but at least I planned on a RV small enough that a smaller and more fuel efficient mid-size truck will do the job. I do hope to save enough for a bicycle at some point to make shorter excurisions from the RV possible without using Bertha.

At least fuel costs are to a good degree under your control when RVing. If you need to spend less on fuel then stay in one spot longer. It’s going to be tough though, I want to see it all!

Before I bought all the RV stuff the $24,000 I had in the bank was enough for about 15 months. In December when my old job got really tough I calculated it out and realized that I could quit my job and not earn a penny in 2012 and been okay as long as I started looking at the beginning of 2013. I never seriously considered doing this though, was just an idle thought.

As S&B homeowners, we have always felt comfortable with 8K in the maintenance/repair/appliance replacement fund. That number has always been ample for us even in a high-maintenance house. Of course, we have had to replenish this fund as it dwindles down.

But I distinguish this from an emergency fund (that, in my mind, replaces living expenses in the event of a job loss). For full-timers living on a regular fixed income, the situation would be much different.

I’ll be interested to see what folks with homes-on-wheels have to say about the subject.Kim recently posted..Moving Along, Kinda

Beckyon June 12, 2012 at 11:24 pm

Yeah, I’ve had the luxury of having maintenance stuff taken care of by the property owners before.

Since I’m not going to be working a steady full-time job but just taking jobs when the money starts running low I guess my plan differs significantly from someone who lives stationary.

The idea is that when my savings gets below say $7,000 or so that’s my cue to focus all my attentions on finding a job since at that point I’ve got less than 2 months of living expenses saved up before I have to start dipping into the emergency fund.

I guess depending on how you look at it then my emergency fund could be considered higher since I’m not waiting until I get down to $5,000 to start looking.

My emergency fund is quite a bit lower, at the moment. My goal is to get it up to $6000, since that’s about three months worth of comfortable living expenses, and probably 4-5 months if I’m super frugal.

Of course, I’m not even close to that, but because of various personal and situational factors, I decided that it really didn’t matter where in the country I was when I saved up my emergency fund. I have enough so that if basic things go wrong, I’ll be covered, but if I have any medical emergencies, I’ll probably be in trouble, since I don’t have health insurance. 😛

I may upgrade my vehicle insurance to include a higher coverage for injuries, since I’m going to do so much driving. That will cover me in the case of any kind of major catastrophic crash, which is the most likely thing that would cause major health expenses, since I’m otherwise pretty healthy.

Once some of my student loans are paid down a little, I’ll probably replace that expense with decent health coverage.

High deductible insurance feels like such a waste sometimes because like you I’m a pretty healthy individual and the chances of a disaster that costs greater than $5000 seems so slim for the $124 that I have to shell out each month for the coverage. But there is always that chance, so I’ll keep it.

It looks like this month’s costs are going to come in right above $900 which sounds good until you factor in that my average monthly wages from the retail job are onlly $980 or so, this month it was higher since I worked Memorial day and got a bit of overtime. It’ll work while Julie is living with me but after August I pretty much gotta leave Bluffton or I’ll be losing money instead of gaining it paying that extra $175.

I’m with you on the Doctor Who thing! And if my RV could travel in time and space instead of just the continental U.S. that would be pretty darn cool.

I’d say the less inclined a person is to repair their own boo-boos, the bigger the fund should be. [That’s probably true of medical, too!] We’ve always had a system where a little money goes into the fund with every paycheck, and we hope to let it ride, baby!

But, you’re probably asking for specifics, and I think our emergency fund is right around where yours is, at the moment.The Good Luck Duck recently posted..Fighting back gently.

Beckyon June 12, 2012 at 11:01 pm

I agree with you there. Things like caulking and rivets I can figure out on my own, but any real mechanical problems are going to be beyond me so I need to have enough saved to pay someone to take care of those things.

Like you I plan to keep adding to it as I go. It will kind of take the place of a retirement fund for me since I don’t expect to ever retire. I’d rather keep a work life balance that favors life more and seek out work that may not pay as well but is more fufilling to me. This is a subject I could devote a post to and probably will at some point.

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